The Coronavirus Aid, Relief and Economic Security (CARES) Act is massive. It also could be the pathway to survival for some small businesses. To help, the Flagler County Chamber has partnered with Chiumento Dwyer Hertel Grant in sponsoring a Florida Small Business Emergency Bridge Loan and Paycheck Protection Plan Webinar for Flagler County businesses, led by attorney Art Zimmet, with the law firm.
The webinar will be moderated by Aimee Stafford, president of the chamber. If you have questions regarding these loans, submit them prior to the webinar to [email protected]. The webinar begins at 1 p.m. Wednesday, April 8.
”We look forward to hearing from you on this matter,” Stafford wrote in a press release. “We are Flagler Strong. Together we will get through this bump in the road.”
To join the webinar, limited to the first 500 callers, dial +1 312 626 6799 or +1 929 205 6099, using the webinar ID 533 873 070. You can also tune via Zoom: https://zoom.us/j/533873070?status=success. There will be no reservations. Stafford recommends logging in or calling in 10 minutes prior.
In advance of the webinar, Zimmet provided these bullet points to help business owners understand what is available:
- Paycheck Protection Program (PPP) is a two-year loan at 1% interest;
- Interest begins accruing immediately, but payments are deferred for six months;
- No collateral or personal guarantee is required;
- The maximum loan amount is 2.5 times “payroll costs,” which is specially defined by the CARES Act;
- Although the loan amount is based on payroll costs alone, up to 25% of the loan proceeds can also be used for rent and utilities among other costs;
- Up to 100% of the loan can be forgiven, and the forgiven amount will not be categorized as taxable income;
- The amount forgiven is determined by measuring how closely to pre-COVID-19 levels a business maintains its full-time equivalent employee count and salary;
- The closer the business maintains those levels, the larger the percentage of the loan is forgiven;
- Because forgiveness is tied to maintaining headcount, businesses with employees that transition to unemployment compensation will not achieve full loan forgiveness under the PPP.
Individual benefits
The CARES Act also impacts investors and other individuals. John Skripko, of Edward Jones, highlighted elements of the CARES Act in a recent press release sent to the Palm Coast Observer:
- Individuals will receive a one-time payment of up to $1,200; this amount is reduced for incomes over $75,000 and eliminated altogether at $99,000;
- Joint filers will receive up to $2,400, with this amount reduced for incomes over $150,000 and eliminated at $198,000 for joint filers with no children;
- Plus, taxpayers with children will receive an extra $500 for each dependent child under the age of 17.
- The CARES Act provides $250 billion for extended unemployment insurance, expands eligibility and provides workers with an additional $600 per week for four months, in addition to what state programs pay;
- Unemployment benefits will also be extended through Dec. 31 for eligible workers;
- And the provisions also cover the self-employed, independent contractors and "gig economy" workers;
- Typically, individuals must pay a 10% penalty on early withdrawals from IRAs, 401(k)s and similar retirement accounts. Under the CARES Act, this penalty will be waived for individuals who qualify for COVID-19 relief for distributions up to $100,000 in aggregate from IRAs and plans that allow COVID-19 distributions. Withdrawals will still be taxable, but the taxes can be spread out over three years;
- Owners of traditional IRAs and 401(k)s are usually required to start taking withdrawals from these accounts once they reach 72. The CARES Act waives these required minimum distributions for 2020;
- 401(k) investors who qualify for COVID-19 relief can now borrow up to $100,000 from their accounts, up from $50,000, provided their plan allows loans.
"These benefits can provide a lifeline to many workers," Skripko says. "And they may be able to help people avoid liquidating some long-term investments earmarked for retirement just to meet their daily cash flow needs. So, in that sense, the money can help individuals feel more secure today and in the future."
